Frequently asked questions

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What is Electorate Allowance?

Electorate Allowance is an expenses of office allowance payable to MPs, including Ministers and Parliamentary office holders, to reimburse them for costs necessarily incurred in providing services to their constituents. Any part of the allowance that is used for allowable electorate expenses, as decided by the Commissioner of Taxation, is not subject to income tax.

Can a Commonwealth employee or a holder of a full-time public office receive additional remuneration for participation on a Commonwealth board?

Anyone employed on a full-time basis by the Commonwealth (i.e. a member of the Australian Public Service or Public Office Holder) may not receive remuneration for holding a part-time public office, but can receive travelling allowance associated with participation on a Commonwealth board.

Section 7(11) of the Remuneration Tribunal Act 1973 provides that a person is not entitled to remuneration in respect of holding, or performing the duties of, a public office on a part-time basis, if the person holds any office or appointment, or is otherwise employed, on a full-time basis in the service or employment of the Commonwealth, the Administration of a Territory, a public statutory corporation, an incorporated company referred to in paragraph 3(4)(da) or an incorporated company all the stock or share in the capital or which is or are beneficially owned by the Commonwealth or by a public statutory corporation.

Whether a State public servant can receive payment for holding a part-time public office (eg on a Federal Government board) is a matter for the relevant State government.

Applies to: Part time; Full time; Principal Executive offices

Can remuneration determined by the Tribunal be paid to a company?

It is longstanding statutory interpretation that only a natural person can hold or be appointed to a public office. Thus payment of remuneration should be made to the person who holds or performs the duties of the office.

Applies to: Part time

How can someone request a review of remuneration?

To seek a review of remuneration, a submission requesting such a review and outlining reasons must be put to the Tribunal. Guidelines are available on the website. The guidelines note that it is preferable to include an indication of support from the responsible Minister.

Applies to: Part time; Full time; Principal Executive offices

Can we put in a submission to the Tribunal before the legislation establishing an office has received Royal Assent?

Yes. In that case the Tribunal may agree to make an indicative determination until the legislation is passed. Once the legislation is passed, the relevant department should advise the Secretariat of that fact and of any amendments to the legislation. The Tribunal will issue a formal determination in due course.

PEO's

The Tribunal is willing to make an indicative remuneration decision prior to the establishment of an office, providing that sufficient information is available to make an informed indicative decision. However, a formal and final Tribunal decision on an office cannot take effect until any legislative requirements (such as the office being legislatively established and declared as a PEO) are completed.

Applies to: Part time; Full time; Principal Executive offices

Do we have to wait for the next Tribunal meeting before our submission can be considered?

No. The Tribunal will consider submissions in between the holding of formal meetings if there is an urgent, real need for that to occur.

Applies to: Part time; Full time; Principal Executive offices

Is the Tribunal involved in appointment processes for Statutory Office Holders, Principal Executive Offices, Holders of Full-Time Public Office or Holders of Part-Time Public Office?

No. The Tribunal's role is defined by the Remuneration Tribunal Act 1973. It determines or advises on remuneration for a public office and has no role or authority in or over the appointment process and related policies. Questions on appointment procedures for offices considered by Cabinet should be referred to the Cabinet Secretariat in the Department of the Prime Minister and Cabinet.

Applies to: Part time; Full time; Principal Executive offices

How is cash salary calculated for a PEO?

Total Remuneration (TR) represents the total value of all cash and non-cash benefits available to the office holder (excluding performance pay, relocation allowances, travelling allowances and compensation for early loss of office). Cash salary is the component of TR that remains when all other benefits, including the employer contribution to superannuation, are honoured.

To determine cash salary:

TR

minus

The Employer's Superannuation Contribution*

minus

Other benefits e.g. motor vehicle and parking, fringe benefits tax and any salary sacrifice payments, such as additional superannuation contributions.

equals

Cash salary

* The Employer's Superannuation Contribution is defined in the Tribunal's PEO Determination. Essentially it is:

for members of PSSap - 15.4% of ordinary time earnings (OTE);

for members of other accumulation schemes - the compulsory employer superannuation contribution that must be made to the fund; and

for members of a Commonwealth defined benefit schemes (e.g. CSS/PSS) - a notional value calculated as 15.4% of the Superannuation Salary (i.e. normally 15.4% of 73% of TR.

Notes re Superannuation Salary:

The Employing Body is responsible for determining Superannuation Salary. The PEO Determination provides that the maximum Superannuation Salary that may be determined by an Employing Body is 73% of TR. An exception can occur where the Tribunal has given express written consent to an alternative 'grandfathered' arrangement for an individual office holder who has a (pre-existing) higher salary for superannuation purposes under the defined benefit scheme rules (see separate FAQ).

For a PEO the notional value may be less than 15.4% of Superannuation Salary, if there is actuarial evidence that the cost to the agency (including the cost of the productivity component) is lower that 15.4%.

Applies to: Principal Executive offices

Do performance payments for PEOs have to be validated by the Remuneration Tribunal?

No, provided the payment is:

within the limit prescribed by the Tribunal, i.e. 15% of Total Remuneration for offices in Bands A, B or C and 20% of TR for offices in Bands D or E (clause 2.12 of the Determination) or a rate specifically approved by the Tribunal for that office;

assessed in accordance with the performance Remuneration Guidelines issued by the Tribunal from time to time.

Note: Not all PEOs are entitled to performance payments.

Applies to: Principal Executive offices

What is meant by: person- specific Total Remuneration reference rate?

Some office holders receive loadings or allowances in recognition of their particular circumstances. In those cases, Tribunal policy is to incorporate these amounts into the Total Remuneration (TR) reference rate, generally for the duration of that person's term of office. The Tribunal will then review the TR reference rate for the office on vacancy and consider whether the existing remuneration is appropriate to the ongoing circumstances of the position. A person-specific rate is not applicable to any subsequent appointee to that office.